If saving were easy, everybody would do it.
Sadly, despite the wealth of this nation, Americans are some of the worst savers in the world. I think it comes from our attitude of "I have a right to enjoy life;" therefore, we spend more than we earn and take on consumer debt to enjoy the goods things in life. The end result of our conspicuous consumption is a negative savings rate for most Americans, resulting in the inability to invest in appreciable assets or weather the slightest financial storm in our lives.
Saving and rising above a poverty level existence is not easy. In this article I propose several ways you can continue to spend at your current rate, while managing to tuck a little under the mattress. The basic premise is to not cut back on spending, but to increase your income.
In the short-term you can use part-time jobs, yard sales, and sites like Ebay to help you get some immediate cash flow. For the long-term, you need to start thinking about ways to achieve your financial dreams. If you are in a financial rut, you must first stop digging the hole any deeper. Take a close look at your lifestyle. What have you been doing over the past five years or so to get into this position?
Typically, when we have decent jobs we tend to spend up to and beyond or income levels. Obtaining financial security often requires delaying gratification until we are on more solid financial footing. Before you start to buy toys, fancy cars, vacations, and other doodads, you should have a minimum of 6 months' living expenses locked away in a certificate of deposit or savings bonds. Ideally, this money should never be touched. It is a cash reserve for life changing emergencies. A sudden urge to visit Montana is not a life-changing emergency.
The subject of making a living and achieving a modicum level of financial security is both fascinating and nerve racking, so I suggest you read some good books on the subject. Start with books by Suze Orman, George Clason, Og Mandino, Thomas Stanley, and Robert Kiyosaki. According to statistics published by the Small Business Administration and the U.S. Census, home-based businesses generate over $400 billion in sales per year, and provide self-employment for millions of Americans. In the past, home based businesses were scorned as envelope stuffers and seamstresses, but with the rise of the Internet home-based businesses have become big business, providing entrepreneurs an average income of $63,000 per year, with start up costs frequently below $5,000. As you can see, home-based businesses are viable, important to our national economy, and potentially profitable.
Achieving financial freedom can be broken into three basic steps: First, limit your spending to your current income. Second, find a way to generate an extra $100 to $500 per month in a part-time, home-based business. And third, rather than spend your extra income, use it to fund investments in appreciable assets.